Tuesday, October 28, 2008

Dow Up 890 After Ten-Times Increase in Commercial Paper Sales

This is as good a reason as any, and better than most.From naked capitalism:

US equity markers were already having a very good day, even by the standards of recent high market volatility, where big snapbacks have become normal after sharps declines. But the very good day turned into a stunner after the announcement today of record commercial paper sales yesterday. The Dow rose 890 points, with a near hyperbolic rise at the close, and the S&P 500 was up just over 7%.

From the Wall Street Journal. Note how cautious the article is, which has not been fully revised from its mid day version, when the Dow had been up as much as 600 points and an end of session retreat was still possible:...

...Note that highs on low volume, from a technical standpoint, say a rally is tenuous and subject to reversal. However, one positive sign was the the recent lows were seeing fewer and fewer new lows for individual stocks.

Sales of longer-term commercial paper soared 10-fold after the Federal Reserve began buying the corporate IOUs, a sign that the central bank's efforts toward unlocking the market may be working....MORE